Causes of the boom years in the 1920s

Extracts from this document...

Introduction

﻿Causes of the boom years Employers were working fewer hours however were being paid more. This therefore meant industrial goods produced were also increasing. American?s had more time for leisure and more money so electrical labour-saving devices were being introduced becoming affordable by many people. Motor cars eased travel to and from work as well as for leisure pursuits. It was the golden age for cinema and sport attracted vast crowds. Reasons for prosperity: government policies Calvin Coolidge stated ?the chief business of the American people is business.? This was his government policy to let business operate as far as possible, free of regulation. Andrew Mellon and him believed wealth filtered down naturally to all classes and to ensure increased living standards for all was to allow the rich to continue make money to invest in industrial development which therefore meant more job opportunities, more wage earners, more consumption etc. ...read more.

Middle

It was the largest for commodities. Previously cars had only been for the wealthy but Ford wanted the ordinary to be able to afford one Effects of growth in car ownership: Ford thought this would strengthen traditional American values but it led to: Road deaths ï 20,000 per year By 1929, motor industry employed 7% of all workers and paid them 9% of all wages Closure of Ford ï factor to recession of 1927 Loss of business by companies providing components to Ford real problems in economy Road building: Breaking of laissez-faire ï federal government expend on road building in 1920s Federal Highway Act 1921 ï responsibility for road building to central government and highways. Construction = 10,000 miles per year by 1929 Chief Designer in Bureau of Public Roads 1936 ï roads built unfit for use because of amount of traffic Motor vehicles ï new service industries e.g. garages, petrol stations etc. ...read more.

Conclusion

demand: Growth in industrial production needed a continuous market in order to fuel the boom as people needed to be convinced to buy things frequently. An aspect of a campaign needed to be bought in which would differentiate between one’s product and that of the competitors to promote unique selling point. Advertising techniques worked for many consumers. Easy credit: Massive consumer boom was financed largely by easy credit facilities 1929 ï $7 billion goods were sold on credit – 75% of cars and half of major household appliances Availability of credit meant borrowers took on debts which they could not repay Influence in foreign countries: High tariffs were used to protect US markets however the government also encouraged businessmen to develop extensive interests abroad in terms of raw materials that fuelled technological developments. US exported vast amounts of manufactured products. In the 1920s with almost full employment, low inflation, high tariffs keeping foreign goods out of USA, benevolent government policies and a consumer boom the prosperity would go on forever. ...read more.

Related AS and A Level History of the USA, 1840-1968 essays

this caused a big problem, especially when you consider the tariffs the British and French governments placed on imported American goods. The tariffs helped the American economy in the short term as many more people bought American manufactured goods but it hurt the economy in the long term.

lead to more overseas countries buying American goods even after the war, further fuelling the economy. It can however be argued that because of economic hardships the war had place on the Allies' economies, they were largely unable to pay back the loans quickly and therefore America would not reap the benefits immediately.

As a result companies across Germany went bankrupt and the unemployed started increasing in millions. The German economic system remained largely capitalistic and there was a huge role involving the government to raise and run the economy. Manufactures were however governed on what and how to produce goods and also at what price the goods should be retailed.

Easy credit need to be accessible for people so they could borrow money and buy goods such as Ford?s cars so therefore this indicates that easy credit was more responsible than the motor manufacturing industry in assisting with the US economic boom in the 1920s as without easy credit, very few people would have been able to buy Ford?s cars.

never been able to prosper to the rate which it did and therefore although the motor industry contributed to economic development, it was allowed to, due to the techniques of mass production and Taylorism. Synonymous to the increased output of consumer goods was the increase in the demand; which grew due to the development of advertising.

to the influx of contrasting political, ethnic and religious ideas and therefore the culture of America was in threat (furthermore there was a fear that immigration was parallel to the loss of housing benefits, availability of jobs, high wages and political influence, which the WASPS had previously held).

The legalizing of prohibition would also lessen the power of such delinquents and result in the dying out of such underground organizations and keep the communities safer. Prohibition was also largely associated with religious views seen in group such as the WCTU and their views against ?demon rum? (Blumenthal 25).